Spanish public debt has reached 1.763 trillion, a new record, but the most important thing for the Government is that the Debt-to-GDP ratio has fallen from 103.4% to 101.5% of GDP in one year. It forgets to mention that inflation in the first half of the year stood at 3.2%, meaning GDP is “inflated” by price increases that do nothing but erode Spaniards’ purchasing power.
Economic theory emphasizes that public debt can and should grow to cope with unexpected situations and crises, allowing “automatic stabilizers” to function. Or to make necessary investments, or… But Spain’s public deficit has become chronic. And while boasting the highest growth in Europe (2.7%), public debt—which accounts for more than 100% of GDP—continues to rise at a rate even higher than that of GDP, at 4.14%.
As a result, over the last 12 months, the State has taken on another 70 billion euros in debt, representing a rate of 5.833 billion per month, or 191.7 million per day.
